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Putin, in pre-election speech, calls for higher living standards

MOSCOW, March 1 (Reuters) - President Vladimir Putin made a pre-election pitch to voters during a major speech on Thursday, ordering officials to halve the number of Russians living in poverty by sharply boosting social and infrastructure spending.

Speaking weeks before a March 18 election he is expected to win, Putin used his annual address to his country's political elite to set out ambitious goals for himself and his allies for the next six years.

"Russia must not only firmly entrench itself among the world's largest economies but, by the middle of the next decade, increase GDP per capita by half," Putin said.

Putin also said Russia needed to increase spending on healthcare to five percent of gross domestic product. He set the targets during the domestic policy portion of a speech in which he also adopted a bellicose tone towards the West and unveiled an array of new nuclear weapons.

Russian officials and global institutions, such as the World Bank, have said that Russia must improve living standards and lift state spending on education and healthcare, both of which currently account for less than four percent of GDP.

Putin said Russia would spend more than 11 trillion roubles ($193.77 billion) on roads in the next six years.

Another 3.4 trillion roubles would be spent on unspecified measures to improve Russia's demographic situation, he said. Russia already gives cash payments to families to encourage them to have children.

Russians should also be better paid to be able to afford housing, and mortgage interest rates should fall to 7 percent from slightly below 10 percent now, he said.

Putin, in power since 2000, also said that he wanted the Russian economy to grow faster than the global one, adding that this should be the key target for a new government which will be formed after the presidential vote.

"The numbers are ambitious, but the problem is that little was said on how to achieve them. It looks like we are setting strategic targets and then we will demand their fulfilment from managers on the ground," said Alexei Devyatov, chief economist at Uralsib Capital.

NO TAX HIKE FOR NOW

Putin, who said he wanted better living standards across the country, did not say where money for ambitious projects would come from, repeating his usual wording that budget spending could be optimised.

Russia is on track to post a budget surplus for the first time since 2011 this year, while its treasury bonds are in strong demand globally, which gives Moscow room to rejig budget costs, analysts said.

The finance ministry's 2018 plan is to raise $3 billion on the global market and another 1.4 trillion roubles on the debt market at home.

It is under less pressure however since a recent increase in oil prices has spurred petro-dollar inflows into the budget.

Putin did not mention any unpopular steps, such as an increase in taxes or a higher retirement age.

Alexander Shokhin, a former deputy prime minister who now heads the Russian Union of Industrialists and Entrepreneurs, said he hoped that the goals would not be financed by increasing the tax burden on businesses.

"He set too many tasks related to an increase in spending on education, healthcare, and the environment," Shokhin said, referring to Putin.

"We would like an increase in taxes not to become the source of fulfilling these tasks," he said. ($1 = 56.7695 roubles) (Additional reporting by Denis Pinchuk and Zlata Garasyuta Writing by Katya Golubkova and Andrey Ostroukh Editing by Peter Graff)